Apple profits rise despite drop in iPad sales

Profits up thanks to iPhone & Mac sales but iPad sales decline by nine per cent

Apple has released quarterly figures and announced an increase in profits, despite sales of iPads plummeting to almost half their pre-Christmas high.

The technology giant made a Q3 profit of $7.7 billion (£4.5 billion) which is a 12% rise of on the same period in 2013. The company sold 35.2 million iPhones between March and June, a 13% increase in sales from last year.

However, the Cupertino firm was dented by a substantial fall in sales of iPads. Apple sold 13.3million tablets in the second quarter, down nine per cent. This is the second quarter in a row that iPad sales have fallen.

In a statement, Apple CEO Tim Cook said: “Our record June quarter revenue was fueled by strong sales of iPhone and Mac and the continued growth of revenue from the Apple ecosystem, driving our highest EPS growth rate in seven quarters,”

Apple will now look to new markets to increase profits further. Cook said he was “incredibly excited” about new operating systems for iPhones and computers as well as “new products and services that we can’t wait to introduce”.

Apple is expected to launch a new iPhone in the coming months and the firm is rumoured to be entering the growing wearables market with the launch of an iWatch predicted for the near future.

Analysts CCS Insight claim the figures highlight Apple’s strong position in the market but also warned that high investor expectations could prove a problem for them going forward.

CCS chief of research Ben Wood said: “Apple has still delivered a strong quarter of results, despite revenue falling slightly below investor expectations and the persistence of a year-on-year decline in iPad volume. Weak iPad sales need to be viewed in the context of. Apple stating that more than half of its customers are first-time tablet buyers.

“As CCS Insight’s research has shown, replacement rates for tablets are proving to be longer than for smartphones. We believe many iPad owners are merely deferring their next tablet purchase. Future growth opportunities also exist in market sectors such as education.

“Apple’s biggest challenge is investor expectation, given that it’s hard to envision a new product category repeating the profit driving impact of a $600 iPhone shipping in excess of 35 million units a quarter.”